Stock Trade of the Week: Triton International (TRTN)

Triton International (NYSE: TRTN) – Triton is engaged in the acquisition, leasing, and sale of transportation equipment. The company specializes in leasing dry, refrigerated, special and tank containers and chassis used in the transportation of those containers.

At the end of 2018, the company’s fleet included 3.7 million containers. Triton operates in Asia, Europe, and North and South America. The company is headquartered in Hamilton, Bermuda and was founded in 1980.

Triton has seen its earnings grow by an average rate of 71% per year over the last three years.

The most recent quarterly report showed earnings growing by 47% compared to the same quarter in the previous year.

Sales have averaged annual growth of 30% over the last three years and they were up by 13% in the most recent quarterly report.

The management efficiency ratings for Triton are strong as well.

The return on equity is at 17%, the profit margin is at 23.1%, and the operating margin is at 52.1%.

The sentiment toward Triton isn’t bearish like I normally look for, but it is more like the stock is flying under the radar. There are only five analysts covering the stock and four of them have the stock rated as a “buy” while the other one has it rated as a “hold”. The short interest ratio currently stands at 3.21 which is average.

Triton has been consolidating in the $30 to $35 area over the last few months. It did slip a little in the fourth quarter, but not nearly as much as the overall market. The stock went through a similar consolidation in the third quarter of 2016 and that was right before the stock moved from under $12 a share to almost $40 in just over a year.

Suggested strategy: Buy TRTN with a maximum entry price of $35.00. I would set a target of at least $48 over the next 6 to 9 months (for a potential return of 40%-plus from here). I would also suggest a stop at $29.75.

— Rick Pendergraft

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